Working Out Loud

August 2011

I was inspired by all the stories of people coming together to make a difference. It felt like a movement, and I wanted to be part of it. So I tried to become the “social media and collaboration guy” at my firm.

After more than a year, though, I failed to make the kind of difference I was rooting for.

Until something happened that got me off the sidelines.

Cheer school

At my firm, I wrote a blog post every week (for 80 weeks) about collaboration and social media topics. I gave presentations to grads and anyone else who’d listen. I championed new tools, trying to demonstrate how powerful they were.

The tools and I gained a following of a few thousand people. And the attention felt good.

But my audience was a small fraction of the 80,000+ employees at my firm. I was simply rallying people who already believed what I believed.

And I wasn’t changing much of anything.

The pitch and the epiphany

So I tried to expand our efforts so I could make a bigger impact. I prepared a pitch for senior executives in London, asking for money for an enterprise platform and a small team.

At the end of my presentation, there was an awkward silence. And only one question.

“What problem are you trying to solve?”

I went home dejected. It was clear now that I had to change my approach. No more stories about building wells in Africa or changing governments in Tunisia. Instead, I had to relate the new tools and practices to specific problems and ROI those executives could recognize.

I had to focus on real inefficiencies, real opportunities, and real commercial benefits at my own firm.

The power of solving real problems

So I stopped running from the ROI question. And I looked for hard dollar savings to more than justify my pitch.

Instead of talking about blogging and tweeting, I provided analysis on:

increasing role proficiency by introducing certifications and training curricula for each expert community

increasing feedback and employee engagement by implementing social upgrades to institutional communications practices

These are all basic enterprise improvements that will add up to a lot of money – even before we tackle the more advanced cases in sales, trading, and other business areas.

And while we scoured the firm for benefits, we took practical steps that didn’t require much investment. We formed communities of practice – replete with formal roles and measurable benefits – to demonstrate the value of a new way of working. We formed a social media council to connect internal practitioners and better understand the problems our businesses wanted to solve.

Now, armed with a real business case, dozens of real examples in our own firm, and compelling evidence from our first 10 communities, I pitched again to those same executives.

And it worked like a charm.

Learning by listening. And doing.

After my epiphany, I’ve stopped promoting capabilities and hoping others would figure out how to use them. I’ve stop talking about the social business revolution.

Instead, I’m listening more to the individuals, teams, and divisions at my own firm. To see how social tools and practices – along with the full spectrum of other work innovations – can help improve the basics of what people do every day.

And I’m listening more to practical social business practitioners like Claire Flanagan, who’s been changing her firm (CSC) in ways big and small for years. (You can listen to her too at AIIM’s upcoming social business conference.) I’m listening to Sameer Patel, Laurie Buczek and others who write about separating “the activism vs pragmatic thinking on the topic of embracing social and collaborative ways of work.”

I’ll continue to be inspired by the big ideas and stories of social change. But, this time, I’ll roll up my sleeves and look and listen for real problems in my firm.

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When it comes to management diversity – gender, ethnic, or other dimensions – most firms are missing the most important tool they have: helping employees to shape their own reputation.

While other methods are helping (e.g., new recruiting practices and support networks), some systemic issues still keep management from being as diverse as firms might like.

Here’s one way to fix that.

Who are the gatekeepers to opportunity?

In most companies, the first and most important step towards getting promoted is having your manager sponsor you. Within a hierarchy, your direct manager is the most important arbiter of your performance and the one who provides access to opportunities.

If your manager supports you, then a group of other managers will review you and the stack of other candidates.

They’re the gatekeepers.

The promotion calculus

Comparing individual performance, particularly for most knowledge workers, has always been problematic. And, as employee-manager ratios have increased over the years, it’s become even more difficult. Now, the most common question in promotion committees tends to be:

“Does anybody know this person?”

And so, even in the most meritocratic companies, even in firms where candidates are neatly reduced to sets of numbers and standard forms, the promotion process involves a complex set of very human calculations by committee members:

Who’s the candidate’s manager?

Do I know and like them?

Am I dependent on them for support of my own candidate?

Do they work in an important area?

Do they have important sponsors?

The candidate’s contributions will be presented, but through the filter of their manager (or his manager). And to a room that very likely has little knowledge of the candidate or what they do.

It’s no surprise then that, even without malice, such a system tends to promote sameness. The same gatekeepers with the same set of relationships tend to make the same kinds of decisions.

A better way

Hierarchies aren’t going away anytime soon. But individuals can take more control over their visibility – and their access to opportunities – by shaping their online reputations.

“…social business platforms enable everyone at work to have more control over their reputation and greater access to opportunities…the roles of a manager as patron, arbiter, and gatekeeper are gradually coming to an end.”

The reason for this is that modern tools and practices make it easier to contribute in a public way and to have those contributions valued by others. That kind of transparency and open access to an audience is much easier to achieve with the advent of social platforms. And they can give employees control over the perception of who they are, what they do, and how well they do it.

A simple experiment

When you do these kinds of things, you create a body of work that more and more people can see. Evidence of accomplishments, business relevance, and impact. Opinions, debates, and thought leadership. All independent of your manager.

Here’s a simple experiment: imagine there’s an opportunity you’d like within a certain group, and they know your boss but they don’t know you.

Who are you? When someone is looking to form an opinion of you, have you made it easy to find your ideas, your work, and the feedback from your peers? Or are you just an email from your manager describing you and your accomplishments?

Are you shaping your own reputation or relying on gatekeepers to do it for you?

Teaching reputation

The good news is that you can learn all the skills you need to shape your own reputation. Some are basic life skills like writing, speaking, and building relationships. Others are relatively new, like using social tools and practices to engage an audience. The combination of all of these can be extremely powerful.

But you’ll only learn them by doing. And not in a 2-hour corporate diversity workshop.

If you’re serious about taking more control over your career, then you’ll need to actively do more to shape your online reputation. (A topic for future posts.)

And if firms are serious about diversity – about really hearing from the many different voices in our firms and promoting the most effective – then they’ll help people develop the necessary skills.

More and more companies are using reputation systems to “motivate contribution and tap into whole new veins of revenue growth and productivity.”

Such systems generate real value. And it looks deceptively easy. (“We’ll use points and badges, too!”)

But, the key idea isn’t easy to implement, as it isn’t simply about gamify-ing work. Reputations are more nuanced than that, and have to be customized to an individual set of people, their kind of work, and their culture.

Here are some guidelines.

Understand the range of possibilities

The reputation systems used by Amazon and foursquare are wildly different. Each is tailored to their user base and to the behaviors they’re trying to motivate. (The same holds true inside a firm, too, as what works for technology people won’t work for private wealth managers.)

The book describes different systems, including their benefits and pitfalls, and demonstrates the importance of thinking through all aspects of what you’re trying to accomplish. Stressing, in particular, the audience you’re trying to reach. The behaviors you’re trying to motivate. And the array of unintended consequences you’ll need to anticipate.

By researching the many options you have for recognizing contributors, you’ll be better able to tailor a system that best suits your needs.

Beware the “Dollhouse Mafia”

The book describes all the unintended consequences and kinds of abuse that can plague each reputation system. And one particularly striking example showed just how badly things can go.

In 2006, Electronic Arts introduced a social on-line game called “Dollhouse.” To help you find other people to play with (this was in the pre-Facebook era), you could identify other players as trusted or untrusted.

Sounds simple enough. But it didn’t take long before the “Dollhouse Mafia” appeared. This group would threaten new users with dozens of “untrustworthy” labels unless they gave up all their virtual currency. If the user didn’t pay up, a barrage of negative labels would render the user a virtual pariah and they’d quit – and stop paying Electronic Arts their $10/month.

So, before your you hand out your first point, badge, or star, you’ll need to anticipate various kinds of abuse of your system and how you’ll deal with it.

Highlight the value to the individual contributor

The most important aspect of your reputation system is answering the question “What’s in it for me?” After all, it’s the individual’s perception of value that will drive their contribution, whether that’s giving more of their data to LinkedIn, writing an Amazon review, or sharing their trading portfolio.

LinkedIn, for example, urges you to complete your profile with both a tempting “profile completeness” percentage graph and a clear value message: “Users with complete profiles are 40 times more likely to receive opportunities through LinkedIn.”

Amazon tells you your reviewer ranking and percentage of helpful votes. (I’m ranked #44,377 with 81 of 88 helpful votes.) But they also give you something to aspire to by promoting top reviewers. Being on that list is highly sought after by people who care about reviews – people like Joanna Daneman, who contributed over 2000 reviews with an astounding 97% helpful rating.

Similarly, Covestor, a community of traders sharing their portfolios, highlights their top traders. At the top of the charts is Mitch Jones, a software engineer. More than getting bragging rights, being atop such a list provides social equity that readily translates into career opportunities.

Be very careful if “value” = money

Explicitly linking an individual’s contribution to the value they get is very important – unless it involves money.

Imagine, at your next holiday dinner, you gave your mother-in-law a $50 bill instead of a nice bottle of wine. What would happen? And why are the two so different?

In “Predictably Irrational,” MIT professor Dan Ariely describes people as living in “two worlds simultaneously – one where social norms prevail, and the other where market norms make the rules.” For certain kinds of work, we’ll perform better for social rewards. But once money is introduced, we change our way of thinking.

For example, he paid students to do some routine tasks on a computer. The more he paid, the better the performance. No surprise. But the best performance was when he didn’t pay anything at all – when the task was requested “as a favor.”

For creative tasks, he found money not only affected performance. It affected whether people contributed at all. He cited an example where a group was looking for legal help for needy retirees. When they asked lawyers to offer less expensive services (at $30 per hour), no one accepted. But when they asked for free services, they received an overwhelming response.

When it comes to reputation systems and encouraging sustained contribution, money – whether it’s cash or gift cards or iPads – is not the answer.

How to take a step

With all of these difficulties and possible pitfalls, is it still worth trying to craft reputation systems at your firm?

The answer, given the size of the benefits seen by firms in last week’s post, is a cautious “yes.”

But it’s clearly not a game. Learning to build a reputation system is one experiment that will require particularly careful research, planning, and close monitoring to avoid the “Mafia” hijacking your good intentions.

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You can generate significant commercial value by giving customers – and employees – ways to shape their online reputations.

In the consumer market, people provide data or other value in exchange for ways to distinguish themselves. It’s our individual desire for visibility and recognition that drives, for example, millions of people to post reviews on Amazon. (The top 10 reviewers alone have contributed more than 62,000 reviews, with an astounding half a million people voting them as helpful).

But this source of value isn’t limited to internet companies. Even financial services firms, regulated and reluctant when it comes to social media, can benefit from creating reputation systems.

“What’s a fitbit?”

The key is to think broadly about social equity – “the perceived value of an individual’s…reputation and following online” – and about ways to drive behavior.

It’s a tiny social pedometer that allows me to constantly monitor how many steps I take. By tracking data over time, I can compete with myself. And by sharing my activity levels over the web, I can compete with my friends.

It’s simple. Yet, just because I’ve exposed my “fitness reputation,” I’ve increased my walking by over 40%. And, with more users contributing more data, fitbit’s value as a “fitness network” is increasing.

$600 million reasons why foursquare matters

foursquare uses a very different reputation system. It started off as a novelty, with people checking-in to places just to get points, badges, and mayorships.

Now, though, with check-ins from over 10 million users, foursquare can provide useful recommendations. And that user base has enticed companies of all sizes (including, notably, American Express) to provide specials to foursquare users.

All those individual quests for virtual recognition have made foursquare worth more than $600 million.

The success of fitbit, foursquare, and other social services demonstrates that on-line reputation can be a powerful force for driving behavior and, in the process, creating valuable corporate assets.

Next, some financial services examples show that even traditional businesses can augment what they do with reputation systems to create significant value.

Using customer reputations to increase commissions

You might think that traders would be the last people who’d share their ideas.

Yet E*TRADE, TD Ameritrade, Charles Schwab and others all have communities that let you “exchange trading and investing ideas with other customers” or “copy the trades of others who you follow.” (Covestor has even built their entire business on sharing. It’s “a world where great investors will let you automatically mirror their strategies, trade for trade.”)

Why?

For the individuals, being rewarded with “Top Performer” status or similar designations provides access to job opportunities in addition to bragging rights amongst people that matter to them.

For the firms, it’s an easy way to drive up volumes and commissions. In one trial, the “copy trade” button generated, on average, another additional trade for every trade that was posted. (Most trades are ignored but those of top performers are copied many times.)

That firm projected the associated bump in volume “could mean an extra $100 million in revenue.”

Using broker reputations to improve portfolio performance

At a sales or trading desk, hundreds of people may contact you every day with ideas. It can be overwhelming.

One hedge fund found a simple way to actually solicit more ideas and quickly identify the best contributors. They created a platform and a competition to let people shape their online reputation.

To do business with the fund, you have to submit your trading ideas (“Buy IBM”) to their on-line system (instead of via email or phone). The system tracks how well every idea performs and aggregates performance ratings by person and by firm. You can compare rankings between firms and between individuals within a firm. (Only the hedge fund can see every idea.)

The firms with the best-performing ideas are rewarded with significant commission revenue.

Individuals, by doing well in the contest, bring in revenue for their firms and a bigger bonus for themselves. And, as one participant said, “it really helps build my resume.” That’s social equity they can take with them wherever they go.

The hedge fund now has access to more ideas than ever – more than 1600 individuals trying to improve their rankings every day. And they can find the best people and the best ideas with just a few clicks.

How will social reputations help your company?

These examples are wildly different. Yet each involves a way for people to shape their reputation, motivating them to contribute something of value. A number of steps. A check-in. Trading transactions and ideas.

It remains an art to create the environment that makes people consistently want to contribute. (The trick is in figuring out which reputation systems apply to which kinds of people and behaviors. Next week’s post will help with this.)

But it’s an art that more and more companies are practicing.

So, now is the time for your firm to take a step. To give customers – and employees – ways to shape their online reputations, motivate contribution, and tap into whole new veins of revenue growth and productivity.